In the morning trade on the 27th, the following three points should be noted.
■ Individual funds are shifting towards small and mid-cap stocks with liquidity.
■ Melco's operating profit downgraded to 5.2 billion yen from 5.8 billion yen.
■ Focus material in the morning: Sumitomo Bakelite, next-generation granular sealing material for semiconductor back-end processes, crack and warpage suppression.
■ Individual funds are shifting towards small and mid-cap stocks with liquidity.
In the Japanese stock market on the 27th, it is likely to be a stalemate. In the US market on the 26th, the NY Dow was up 65 points and the Nasdaq was down 152 points. Buying was dominant due to expectations of rate cuts in September. NY Dow updated its all-time high due to expectations of a soft landing as durable goods orders and the Dallas Fed manufacturing activity index exceeded expectations. On the other hand, there was adjustment of holdings in some semiconductor stocks such as Nvidia ahead of earnings announcements. The Osaka comparison closing price for the Chicago Nikkei 225 futures was 38,035 yen, 5 yen lower. The exchange rate is fluctuating around 1 dollar = 144 yen 30 sen.
It is likely to start with small movements as it shifts to the Chicago futures. Due to the weak movement of US semiconductor stocks, high-value stocks that have a significant impact on the index are likely to weigh on high-tech stocks. Yesterday, there was also selling pressure driven by futures due to the influence of the yen's appreciation, which temporarily fluctuated to around 143 yen to the dollar, so the market is likely to continue to be sensitive to exchange rates. On the other hand, in addition to geopolitical risks in the Middle East, Libya has revealed a halt in the production and export of oil, which is likely to lead to an increase in crude oil futures and a focus on energy stocks.
As for Nvidia's earnings, there are also cautious forecasts, and there may have been selling pressure on US semiconductor stocks. With adjustments seen in domestic semiconductor stocks at the moment, expectations have already been factored in. Although there is a possibility of short-term selling pressure, it would be desirable to return to neutral before Nvidia's earnings and consider a buying opportunity in anticipation of a rebound.
In addition, trading volume on the Tokyo Stock Exchange Prime has been thin, with daily trading volume remaining in the 1.3 billion share range. With limited trading activity related to indexes, the Nikkei average is expected to move within a narrow range. On the other hand, yesterday's Growth 250 Index has rebounded strongly with a nearly 5% increase. With the 18th July high within reach, individual investors are likely to shift their funds towards small and mid-cap stocks with liquidity.
Melco revised its operating profit downwards for March 2025 from 5.8 billion yen to 5.2 billion yen.
Melco <6676> announced a revision of its financial estimates for the fiscal year ending March 2025. The revenue has been revised downward from 150 billion yen to 133 billion yen, and the operating profit has been revised from 5.8 billion yen to 5.2 billion yen. The listing of its subsidiary, Shimadaya, has been approved. Due to the implementation of a stock dividend (stock distribution type spin-off), Shimadaya will be excluded from the consolidated subsidiary as of October 1, 2024.
Materials of concern in the morning session
- The NY Dow rose (41240.52, +65.44)
- 1 dollar = 144.50-60 yen
- US crude oil futures rose (77.42, +2.59)
Expectations for inflation to ease in the US.
Active share buybacks
Request for improvement in corporate value by the Tokyo Stock Exchange.
- Sumitomo Bakelite <4203>: Suppression of cracks and warping in next-generation granular encapsulation materials for semiconductor back-end processes.
- Tokai Rika <6995>: Expanding semiconductor sales to external customers, introducing new facilities compatible with 0.35 micrometers.
- Isuzu Motors <7202>: Collaborating with a new US company in the field of self-driving trucks, aiming to achieve on-road driving.
- Shibuya Kogyo <6340>: Sales revenue of 150 billion yen for the fiscal period ending in June 2027, expecting an increase in domestic renewal demand.
- Hitachi <6501>: Partnering with Singtel to build next-generation data centers for the Asian market.
- Kawasaki Kisen <9107>: Memorandum of understanding with Kei Line Wind Services, a UK company, for cooperation in floating offshore wind power.
Wacoal HD＜3591＞ to consolidate domestic production, focusing on innerwear in Nagasaki and Fukui, and improving profitability.
ITOCHU＜8001＞ acquires solar power leases from One Energy, creating synergy for surplus electricity trading.
Isuzu Motors<7202> to increase production of electric trucks in the US, in anticipation of environmental regulations.
JFEHD＜5411＞ JFE Engineering receives EPC contract for a grid-connected battery storage facility from JAPEX.
Mitsubishi Heavy Industries<7011> jointly demonstrates automation of storage and cargo handling.
Fujitsu<6702> attracts international collaborative trials and measures for drug loss prevention.
Nomura Research Institute<4307> NRI SecureTechnologies provides comprehensive support for next-generation network 'Web3'.
Nippon Electric Glass<5214> solid-state sodium-ion batteries improve durability to 200°C.
- Yashu Electric <3153>: New business in power supply maintenance and heating/cooling, establishment of dedicated organization.
- MinebeaMitsumi <6479>: New line at Thai factory, production volume of rotation angle sensors tripled.
- Kaneka <4118>: Opening ceremony at new factory in Hokkaido, production of blood purification devices.
- Mitsui Sumitomo Construction <1821>: Initial application of tunnel construction for invert reinforcement method, reducing construction period by 35%.
- Nippon Steel <5401>: Absorbing and merging Nisshin Steel, a subsidiary of the group, in response to demand from semiconductor factories.
- Denka <4061>: Permission granted for the use of Ebola rapid diagnostic equipment from Congo.
☆ Schedule of events in the morning session
Not applicable.
- 10:30 Industrial enterprise profit for July (June: +3.6% YoY)